Housing supply

In our response to the draft Productivity Commission's Introducing Competition and Informed User Choice into Human Services: Reforms to Human Services Draft Report, National Shelter refects the premise that social housing is broken, and argues for a systemic approach to reform taking in the whole of the Australian housing system including the growing private rental segment and changing patterns of home purchase and retention.

Rental Affordability Index for Australia

National Shelter, Community Sector Bank and SGS Economics and Planning have partnered to launch Australia’s first ever Rental Affordability Index.

The Index reveals the depth and extremity of housing stress faced by renters in the current market. Both low income and moderate income households suffer poverty due to high rental costs.

Housing stress occurs when households pay 30% of income or more on rent. Low income households are required to pay around 65% of income on rent to access a tenancy. This means that rents are extremely unaffordable.

This first issue of the Index reveals evidence that low income households are in a dire situation, single income households are the worst off and rent costs are now locking low and moderate income households out of inner cities. The report gives a blow by blow account of rental affordability in Australia’s major cities.

Rental Affordability Index for Australia

National Shelter, Community Sector Bank and SGS Economics and Planning have partnered to launch Australia’s first ever Rental Affordability Index.

The Index reveals the depth and extremity of housing stress faced by renters in the current market. Both low income and moderate income households suffer poverty due to high rental costs.

Housing stress occurs when households pay 30% of income or more on rent. Low income households are required to pay around 65% of income on rent to access a tenancy. This means that rents are extremely unaffordable.

This first issue of the Index reveals evidence that low income households are in a dire situation, single income households are the worst off and rent costs are now locking low and moderate income households out of inner cities. The report gives a blow by blow account of rental affordability in Australia’s major cities.

National Shelter submission to the Reform of the Federations Discussion Paper

Australia faces a number of significant housing issues, including an unacceptable level of homelessness, high levels of housing stress amongst low income householdsand especially renters, and declining affordability of home purchase in major cities.

These various issues are closely interlinked and require coordinated intervention on a number of levels. Current government efforts are fragmented, split between various agencies at Commonwealth, State and Local Government levels. This Submission to the Reform of the Federation White Paper Taskforce fragmentation is a greater issue than overlap or duplication, and requires greater cross-government collaboration to make a genuine impact.

In housing assistance, the greatest issue is the inadequacy of levels of assistance. This inadequacy shows itself on social housing in the form of long waiting lists for assistance, while in Commonwealth Rent Assistance (CRA) it shows itself in the high proportion of households who are in housing stress despite receiving assistance.

This inadequacy in both forms of support is a significant contributor to levels of homelessness. None of the three alternatives canvassed in the Discussion Paper offers any clear way of alleviating this inadequacy. Option 2 is essentially a “status quo” option, while Options 1 and 3 offer significant rearrangements of responsibilities. Both the reform options appear to have significant problems and drawbacks without appearing to solve any of the significant problems facing housing assistance.

Tax reform essential for housing affordability

National Shelter believes that Australia’s Future Tax System Review must form the starting point for further discussion of tax reform around housing and land dealings in order to tackle housing affordability.

There are currently a range of tax settings which distort the behaviour of home owners and investors in the Australian system which need to be addressed. These distortions encourage over-investment in large, more expensive properties for owner occupiers and to the upper end of the market for investors in rental properties. They create inflationary pressure as investors and owner occupiers compete for the same properties. These policies appear to conflict with Australia’s principal housing policy of the past 50 years, to encourage home ownership.

National Shelter supports policies which balance the goal of home ownership for most with settings to encourage investment in long term, secure, affordable, accessible and well located rental housing. As a principle, if the Australian tax system is to support investment in rental housing it could be better targeted to meet the shortfall in the supply of affordable housing available to lower income earners, which would deliver a social good in exchange for a tax benefit.